The Industrial Internet promises to help decision-makers in the oil and gas industry to realize significant improvements in operational efficiency by reducing capital costs and making the most of existing resource reserves.

Oil and gas exploration is marked by high capital costs. The Canadian Association of Petroleum Producers (CAPP) estimates that the sector invested $51-billion in capital spending in 2010 alone. At that rate of capital outlay, a one-per-cent reduction in capital expenditure achieved by Industrial Internet technologies could save the Canadian oil and gas industry almost $8-billion over 15 years.

Operators and engineers, for example, are already using advanced sensors to collect information from equipment, such as drill rigs and pumps, to make them operate more efficiently and last longer. Oilfield technicians are using remote monitoring technologies to ensure that equipment runs safely at optimum capacity.

CAPP estimates that in 2010, Canada possessed about 174 billion barrels of oil reserves and 70.4 trillion cubic feet of natural gas. However, only about three per cent of that oil represents traditional reserves, with the remainder found in the oil sands. As sources of readily available natural gas decline, producers are relying more heavily on unconventional sources, such as shale gas.

Industrial Internet technologies are assisting operators to make such wells more productive, and extend their service life.

Resource technicians are employing remote sensors to log well conditions, while employing technologies, such as remotely activated pumps, to stimulate optimized product flow. Technicians are also accessing wireless communication systems that link subsurface and aboveground information networks to empower them to make real-time production decisions from thousands of kilometres away.

Geologists are using advanced data analytic software to better understand and anticipate reservoir behaviour. New 4-D seismic technology, for example, is not only helping to locate reserves through ultrasound technology, but also to track resource migration through the production life cycle.

By embracing the full suite of opportunities offered by the Industrial Internet, Canadian oil and gas workers will be empowered to make decisions that will lower costs, increase productivity, and expand resource potential.